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Refinance Costs and Break-Even Calculator Australia
Break-even is the number of months it takes for your monthly saving to repay the net cost of switching. Add up discharge, government, application, valuation, settlement and any break costs, subtract cashback, then divide by the monthly saving.
Break-even
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- Total switching costs
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- Net cost after cashback
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- Net position after the years entered
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Estimates only, based on the figures you enter. This is general information, not credit or financial advice, and not a lender quote. See the calculator disclaimer.
How to calculate refinance break-even
Break-even (months) = (switching costs − cashback) ÷ monthly saving. If switching costs $1,600, cashback is $1,000 and you save $150 a month, the net cost is $600 and break-even is 4 months.
Use the monthly saving after ongoing fees. The main refinance calculator works this out by comparing repayments, monthly fees and annual fees on both loans.
Costs of refinancing a home loan in Australia
- Discharge fee: charged by your current lender to close the loan.
- Government fees: state land registry fees to remove the old mortgage and register the new one. They vary by state.
- Application or establishment fee: charged by some new lenders and often waived in refinance offers.
- Valuation and settlement fees: some lenders charge them; others include them.
- Fixed-rate break costs: if you leave a fixed loan early, the lender may charge a break cost that depends on rate movements. Ask for a written quote; it can be large.
- Lenders mortgage insurance: may apply if the new loan is above 80% of the property value. Check your LVR first.
Certain early termination fees were banned for new residential home loans from 1 July 2011. Discharge fees, government fees and fixed-rate break costs can still apply. Ask both lenders for a written list of costs and see Moneysmart's guide to switching home loans.
When refinancing may not be worth it
- The break-even time is longer than you expect to keep the loan.
- A large fixed-rate break cost cancels out the saving.
- The new loan has higher ongoing fees or lacks features you use, such as an offset account.
- Your current lender will match the offer without any switching costs.
To weigh two quotes with their costs and cashback, use the refinance comparison calculator.
Turn the estimate into your next step
Leaving a fixed period early? Follow the fixed-rate refinance guide to obtain and enter a dated break quote. Then check when switching may fit your plans instead of relying on a universal break-even threshold.
Frequently asked questions
How much does it cost to refinance a home loan in Australia?
It depends on your lenders and state. Common costs are a discharge fee, government registration fees, and sometimes application, valuation, settlement and fixed-rate break costs. Ask each lender for a written list.
What is a good break-even time for refinancing?
Compare the break-even time with how long you expect to keep the loan; there is no single suitable period for everyone. Switching costs should be recovered within your expected time in the loan for the estimated savings to outweigh them.
Does cashback count towards break-even?
Yes. Subtract cashback from your switching costs to get the net cost. If cashback is larger than the costs, you are ahead from settlement, provided the new loan is not more expensive.
Are there exit fees when refinancing?
Certain early termination fees were banned for new residential home loans from 1 July 2011. Discharge fees, government fees and fixed-rate break costs can still apply.
Should I include a fixed-rate break cost?
Yes, if you are leaving a fixed rate early. Break costs depend on how rates have moved since you fixed, so ask your lender for a written estimate before deciding.
Sana Hosseni is a mortgage broker with more than 23 years of experience and an elected director of the MFAA Board. More about Sana and these calculators.
Continue exploring
Where will your next move take you?
Choose the calculator or guide that helps you understand your next refinance decision. Browse all calculators or explore the guides.
Calculators and practical guides
Compare your current loan with a new loan, including repayments, fees and payoff time.
Work out your loan-to-value ratio, equity and distance from 80% LVR.
Estimate your usable equity and the loan amount at your chosen LVR.
Compare two offers against your current loan, including fees and cashback.
